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This Ari Paul guy articulates an issue I've always had with the XRP adoption paradigm, being the whole implicit result of a transfer of wealth to a coin the bulk of which is (at present and for the foreseeable future) controlled by a private party...but I've rationalized this concern through my understanding as to how the whole process is being rolled out (building liquidity from the bottom up, starting with small players/transactions and building), the inflationary nature of the coin and the FOMO power of speculation...ultimately, I think he will be proved wrong because of the inherently disruptive nature of the technology...but definitely food for thought! good stuff!

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If banks can create a bankcoin that is better and faster and can do settlements how come they haven't all these years? Look at SWIFT, they had 40 years to come out with a new technology and work with banks to come out with some type of a bankcoin and just recently they created a GPI only because they felt the pressure and it seems they scrambled to create it.

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His argument assumes that banks can create an equal or better technology than xrapid/xrp.

sort of...I took it to say that banks might prefer to use inferior tech if they can control it...one of my hopes is that ultimately banks won't have a choice but use XRP if they want to remain competitive/relevant

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He avoids DS' point that XRP exists as a "neutral" remittance tool between banks, such that none control it. Otherwise, there is not enough incentive for banks to cooperate with one bank's crypto project. He seems convinced there is no incentive for banks to use XRP for settlement as long as the infrastructure is there. I do take him though, to be poking around at the classic chicken/egg problem of how to create usage when it is not fully in use already.

Edited October 5, 2018 by WrathofKahnemana little bit of style in the sty?

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I understand that Ripples current target market is small and medium banks, banks outside the west etc. These companies have a vested interest in finding a cheaper way of transferring money across currency that avoids the excessive charges run up by correspondent banking network which profits only the big US and European banks.

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First and foremost, lets focus on the positive - Ari says that he can envision a scenario where xrp is used at scale for remittances. Remittances are Ripple's target #1, so it appears that experts agree that the current trajectory could in fact lead to the accomplishment of the initial goal. This is good.

Regarding interbank transfers, Ari does have a point - banks are businesses, and businesses like to make money. It is not a matter of "if" they will develop a competing bankcoin; they WILL develop competing bankcoins (Quorum is a good example). At that point is becomes a race towards adoption; large banks will throw their weight around (i.e pressuring smaller partners) in hopes of pushing adoption, whereas Ripple will have to counter with cost/speed of implementation and breadth of RippleNet network. The first one to reach broadest possible adoption will win.

My guess is that Ripple end up taking the race solely due to the fact that the addressable market of worldwide banks that could use the service but have no discretionary funds to develop a proprietary system will be larger than the market of banks that can either 1) develop their own bankcoin or 2) be pushed into adopting a walled-garden bankcoin.

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He seems to avoid DS point that XRP exists as a "neutral" remittance tool between banks, such that none control it. Otherwise, there is not enough incentive for banks to cooperate with one bank's crypto project. He seems convinced there is no incentive for banks to use XRP for settlement as long as the infrastructure is there. I do take him though, to be poking around at the classic chicken/egg problem of how to create usage when it is not fully in use, yet.